ArmInfo. Ameriabank will act as financial intermediary for Armenia in USD 175m blended finance impact securitization transaction launched by responsAbility AG arranged by JP Morgan and backed by Overseas Private Investment Corporation (OPIC).
As the press service of Ameriabank told ArmInfo, the transaction is aimed at financing SMEs in emerging markets. It allows investors to access a pool of assets that offers attractive market return, is less correlated to traditional public debt and equity investments and creates high development impact. The arranger and placement agent of the transaction is JP Morgan, while key investors in this blended finance vehicle include the Overseas Private Investment Corporation (OPIC), who provided the catalytic capital necessary to mobilize the private institutional investment in the deal.
"This securitization shows that the fast-growing microfinance and SME finance space in emerging markets has now reached a maturity that allows it to access financing from mainstream capital markets", commented Thomas Muller, Co-Head Financial Institutions Debt at responsAbility.
"We are delighted to be part of global pool of quality microfinance and SME finance players, participating in an innovative, global capital markets transaction managed by responsAbility, arranged by JP Morgan, and invested in by OPIC and other high quality investors in pursuit of the Sustainable Development Goals", commented Gevorg Tarumyan, CFO, Deputy General Director of Ameriabank. To recall, in February 2019 Ameriabank entered into EUR 16.8M long-term subordinated loan agreements with several funds, managed by responsAbility Investments, including the Global Climate Partnership Fund (GCPF) as well as funds focusing on micro- and SME finance. The new long-term facilities enable Ameriabank to strengthen its capital, therefore making sufficient buffer to finance Armenian businesses and green energy projects.
During the agreement signing ceremony speaking on behalf of responsAbility, CEO Rochus Mommartz underlined: "Financial institutions with inclusive business models play a key role in driving development. We are pleased to partner with Ameriabank, a successful and dynamically evolving institution which actively contributes to funding and greening the Armenian economy." The start of cooperation dates back to June 2016 when Ameriabank, through its investment manager represented by responsAbility Investments AG, successfully placed $ 20 million debt securities in four Luxembourg investment funds, planning to channel proceeds from security placement into lending to small and medium-sized enterprises (SME) and financing of renewable energy and energy efficiency projects in Armenia.
To note, responsibility Investments AG is a leading asset manager for impact investments in emerging economies, manages USD 3 billion of assets through a range of investment vehicles that provide private debt and private equity to some 540 companies with inclusive business models across 90 countries. Founded in 2003, the company is headquartered in Zurich, Switzerland, and has local offices in Bangkok, Geneva, Hong Kong, Lima, Luxembourg, Mumbai, Nairobi, Oslo and Paris.
J.P. Morgan Chase, one of the oldest and most influential financial conglomerates on the planet, according to Forbes magazine, is the largest public company in the world. Headquarters of the company are located in New York. J.P. Morgan Chase leads in the field of investment and commercial banking services: assets at the end of 2018 exceeded $ 2.6 trillion and this is the first place among the largest banks in the United States. The hedge fund managed by JPMorgan Chase is the second largest fund of such kind in the United States.
The Overseas Private Investment Corporation (OPIC) is a self-sustaining U.S. Government agency that helps American businesses invest in emerging markets. Established in 1971, OPIC provides businesses with the tools to manage the risks associated with foreign direct investment, fosters economic development in emerging market countries. OPIC fulfills its mission by providing businesses with financing, political risk insurance, advocacy and by partnering with private equity investment fund managers. OPIC provides long-term financing to US investors, companies with US investments, in which at least 25% are owned by owners from the United States or American financial institutions.
According to the data of FinRating of Banks of Armenia prepared by ArmInfo IC, as of January 1, 2019, Ameriabank retains leadership in the main balance sheet indicators: assets exceeded $ 1.6 billion, credit investments - $ 1.1 billion. Ameriabank also holds leadership in corporate lending-$ 920.2 .The bank is among leaders in industrial sector lending (including the energy complex), the agricultural sector, construction, trade, transport and communications, catering and services. The bank also leads in lending to SMEs - $ 193.6 million. In terms of net profit, Ameriabank also dominates - $ 21.7 million. In terms of total liabilities, Ameriabank is also a leader, in the structure of liabilities the share of funds attracted from international financial institutions is about 30% or $ 424.5 million, ensuring for the bank the leading position in this indicator. Ameriabank, operating on the Armenian market since October 31, 1996, is a universal bank providing investment, corporate and retail banking services in the form of a comprehensive package of banking solutions. The shareholders of the bank as of April 1, 2019 are the Ameria Group CY Ltd. - 56.6%, EBRD - 17.8%, Asian Development Bank - 13.98%, ESPS Holding Limited - 11.62%.